Lease and Lease-Purchase Agreements

I. PURPOSE

To outline responsibilities and procedures regarding the lease and lease purchase of equipment.

II. RESPONSIBILITIES AND PROCEDURES

A.No capital or operating lease of equipment may be entered into or will be binding on the University unless the provisions of this policy and procedure are satisfied.

B.The Chancellor and Vice Chancellor for Business and Financial Affairs are authorized to sign capital leases, and operating leases with a period of performance exceeding one (1) year.

C.Proposed lease agreements and related documentation for the lease of equipment should be forwarded to the Director of Purchasing Services for appropriate processing.

D.The proposed lease agreement should be accompanied by a requisition and include as a minimum the following:

1. Term of Lease
2. Monthly Rental
3. Responsibility for maintenance of equipment.
4. Any buy-out options at the end of lease.

E.In those instances where need has not been previously established and reasons for the proposed lease is not obvious, a memo describing the reasons for the lease should accompany the proposed agreement.

F.Prior to submitting the proposed lease agreement to the Vice Chancellor for Business and Financial Affairs for signature, Purchasing Services, in consultation with the University Counsel, the Assistant Treasurer, and the Controller's Office, shall review the proposed lease to:

1.Ensure the contract contains clauses which adequately protect the University.
2.Establish the competitive nature of the purchase.
3.Analyze lease versus buy options.
4.Determine the nature of the lease (capital versus operating).
5.Review the financial impact of the proposed long term lease obligation.

III. EXCEPTIONS

Leases of real property and month-to-month rental agreements with a period of performance not exceeding one year are not covered by this procedure.

IV. RELATED ITEMS

Limits of Authority (University Purchasing Policy, 8.A)

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